National Bank of Georgia Plans to Regulate Cryptocurrencies

The National Bank of Georgia (NBG) is reportedly planning to regulate the cryptocurrency market in the country, according to its governor, Koba Gvenetadze. The Financial reported that the forthcoming draft law would outline a series of rules for virtual asset service providers to register before proper authorities to comply with anti-money laundering rulings.

“We have developed an initial draft of the relevant legislative changes in accordance with Financial Action Task Force requirements. We are also benefitting from technical assistance of the International Monetary Fund staff in the development of this regulatory framework,” Gvenetadze pointed out in an interview with The Financial.

Also, the governor added: “It should be noted, however, that before the aforementioned regulations enter into force, some measures have already been taken by the NBG. In particular, financial institutions have been banned from providing virtual asset  exchange  and transfer services. Also, persons that carry out activities related to virtual assets should be classified by financial institutions as high-risk clients and should be subject to appropriate enhanced preventive measures.”

There is no timeline set for the draft bill, which is discussed in the country’s parliament.

Hotspot for Bitcoin Miners

After the Chinese crackdown on the industry, Georgia became a hotspot for several companies that wanted to set up  Bitcoin  (BTC) mining facilities. However, the NBG has issued some warnings on the risks that dealing with virtual currencies carries, although this implies a change in its stance towards digital assets by endorsing a wide regulation in the small nation.

Several institutions in Georgia are already investing in cryptocurrencies, but the finance sector has been on the fence. With its eMoney service, Liberty Bank offers a way to buy and sell cryptocurrencies. But it is still a long way from the point where virtual money replaces so-called fiat currencies, such as the dollar or Georgia’s lari.

The National Bank of Georgia (NBG) is reportedly planning to regulate the cryptocurrency market in the country, according to its governor, Koba Gvenetadze. The Financial reported that the forthcoming draft law would outline a series of rules for virtual asset service providers to register before proper authorities to comply with anti-money laundering rulings.

“We have developed an initial draft of the relevant legislative changes in accordance with Financial Action Task Force requirements. We are also benefitting from technical assistance of the International Monetary Fund staff in the development of this regulatory framework,” Gvenetadze pointed out in an interview with The Financial.

Also, the governor added: “It should be noted, however, that before the aforementioned regulations enter into force, some measures have already been taken by the NBG. In particular, financial institutions have been banned from providing virtual asset  exchange  and transfer services. Also, persons that carry out activities related to virtual assets should be classified by financial institutions as high-risk clients and should be subject to appropriate enhanced preventive measures.”

There is no timeline set for the draft bill, which is discussed in the country’s parliament.

Hotspot for Bitcoin Miners

After the Chinese crackdown on the industry, Georgia became a hotspot for several companies that wanted to set up  Bitcoin  (BTC) mining facilities. However, the NBG has issued some warnings on the risks that dealing with virtual currencies carries, although this implies a change in its stance towards digital assets by endorsing a wide regulation in the small nation.

Several institutions in Georgia are already investing in cryptocurrencies, but the finance sector has been on the fence. With its eMoney service, Liberty Bank offers a way to buy and sell cryptocurrencies. But it is still a long way from the point where virtual money replaces so-called fiat currencies, such as the dollar or Georgia’s lari.

Source: https://www.financemagnates.com/cryptocurrency/regulation/national-bank-of-georgia-plans-to-regulate-cryptocurrencies/